Executive Summary
The growth of the financial planning profession over the past 40 years is a testament to the fundamental need that it serves; if financial planners weren’t delivering value, firms wouldn’t be growing the way that they are.
Yet for so many planning firms, there is no process to really evaluate what it is that clients want, and whether they’re receiving it. Instead, we craft an offering that we think clients will like, and then try to convince them to hire us to receive it.
But is that really the best way to build a business’ service offering?
The inspiration for today’s blog post comes from an interview, published in Bob Veres’ Inside Information newsletter, with Stephen Wershing of The Client Driven Practice. In the article, Wershing makes a striking point – that financial planning practices, in the process of developing a service for their clients, rarely take the most fundamental first step: doing the market research to figure out what their clients actually want.
Wershing makes the point most effectively in discussing – and criticizing – the common practice management and marketing advice of the industry:
“They all tell you that you have to define your target, and then spend time with yourself. You lock yourself in a room and dream up what people want, and take that dream out to the marketplace as if it was real market research. Strange as it sounds, their [the practice management consultants’] assumption—which nobody seems to be challenging—is that it will be just as effective as if you did real market research.” – Stephen Wershing
Wershing’s prescription includes conducting surveys, focus groups, and developing a client advisory board, so that you can really get at what your clients actually want. Not only, perhaps, to discover what your clients really do and don’t value, so you can provide it to them, but also to help you better develop your explanation to prospects about what it IS you REALLY offer that does provide value. Wershing notes that this can be far more effectively than simply using the common “differentiators” that most financial planners use, like providing good service, customized financial advice, and peace of mind – which I think he rightly points out is not really a differentiator at all, given that virtually every financial planner seems to say the exact same thing!
But I think Wershing’s criticism gets at a much more fundamental issue about how so many financial planning firms are built; many planners create their business as a reflection of themselves and what they would want, rather than a business-oriented endeavor to determine what the customers/clients want, and deliver it to them. Perhaps it’s part of the nature of being in the advice-giving business; we have a constant tendency to explain to our clients why our advice is right, and although we may work hard at hearing our clients express themselves about their own financial goals and concerns, we often are not nearly as effective at listening to constructive criticism about our own selves and businesses and the services we offer. As Wershing points out, “If a client says ‘this other advisor provides these services better than you,’ we have seen advisors respond with a version of ‘Let’s review why we provide this service this way.’ The message is: ‘You are wrong; we know how to do this,’ which stifles the conversation.” Have your clients ever asked for something to be different in their financial planning meetings, or experience, or process, with you? Did you view their “suggestion” as an opportunity to change how you provide your services, or did you “educate” the client about why what you do is the “right” way to deliver financial planning? And if you did the latter – perhaps with the best of intentions – what is it that even makes that the “right” way to do it in the first place… besides, perhaps, the fact that you think everyone else does it in the same [undifferentiated] way?
Thinking about this makes me wonder how many aspects of financial planning we emphasize that aren’t really of value to clients, and what we fail to focus on that really would be valuable to them. As I have written previously in this blog, I think we actually have a very poor perspective on what it’s like to BE a financial planning client, since, remarkably, so few of us every actually become consumes of the service we offer. No wonder we may not really understand what is and is not most important from the client’s perspective.
So what do you think? Is your practice created in your own image, or was it truly created for the wants and needs of your clients? Have you really ever done any market research of what your target clients say they want, as opposed to simply delivering them what you think they need, and do you have any way to differentiate between the two? Do you have a systematic process to determine what your clients really want and need, whether you’re delivering it to them, and how to deliver it more effectively in the future?
